Daily Market Commentary: 50-day MAs Defended
($RUT)
via StockCharts.com
Torrid action in Small Caps undid what looked to be a solid defense of the 50-day MA and breakout support in the Dow. Volume climbed to register a distribution day, but there may be enough to see a longside play tomorrow.
($INDU)
via StockCharts.com
The S&P managed a similar defense of its 50-day MA. But did so under the influence of a bull trap. Overhead supply remains a significant concern and it may struggle once again if it makes it back to 1,343. Technicals continue to weaken.
($SPX)
via StockCharts.com
The Nasdaq recovered a little to make it back above its 50-day MA and even managed to close a little higher. The bull trap is as much a threat here as it is for the S&P.
($SPX)
via StockCharts.com
Adding to Nasdaq woes was the breakdown of the consolidation in the Percentage of Nasdaq Stocks above the 50-day MA. At 42%, more Nasdaq stocks are below their 50-day MA than above it. True reversals usually emerge when this indicator drops below 30% - so the downside isn't done yet.
($NAA50R)
via StockCharts.com
The semiconductor index tells its own troubles. Ugly though its chart looks, especially with the loss of the 50-day MA, it has reached a potential support level of former declining resistance (now support). It's an aggressive long for those looking to play this side of the market.
($SOX)
via StockCharts.com
Tomorrow and for the next few days, longs can look to the Dow and Semiconductor index, shorts might find more fruit in Small Caps. Not a very attractive market in either case. Sell in May and Go Away proving to be apt.
Return from vacation over the weekend, but then the issue of getting the new rental house wired for internet begins....
Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.
Zignals offers a full suite of FREE financial services including price and fundamental stock alerts, stock charts for Indian, Australian, Frankfurt, Euronext, UK, Ireland and Canadian stocks, tabbed stock quote watchlists, multi-currency portfolio manager, active stock screener with fundamental trading strategy support and trading system builder. Forex, precious metal and energy commodities too. Build your own trading system and sell your trading strategy in our MarketPlace to earn real cash.
You can read what others are saying about Zignals on Investimonials.com.